1. CASE STUDY: READY MIXED CONCRETE
Frank J.Vondrak
Antitrust Division
United States Department of Justice

2. THE MARKET Ready Mixed Concrete
Used in various construction projects, including buildings, sidewalks, driveways, bridges, tunnels and roads
Ingredients include cement, aggregate (sand & gravel), water and often other additives
Made on demand and, if necessary, shipped to construction site
Delivery range limited to 45 minutes from plant

3. THE MARKET Indianapolis, Indiana Metropolitan Area
Population over 1 million
Rapid growth resulting in a lot of construction

4. THE MARKET Competitors
American Concrete
Beaver Materials
Builder’s Concrete
Carmel Concrete
Irving Materials, Inc.
Prairie Materials
Shelby Gravel
Others

5. THE CONSPIRACY Conspirators
American Concrete
Beaver Materials
Builder’s Concrete
Carmel Concrete
Irving Materials, Inc.
Prairie Materials
Shelby Gravel
Others

6. THE CONSPIRACY Beginning in July 2000 Continuing until May 25, 2004
Conspiracy to fix the price of ready mixed concrete

7. THE CONSPIRACY First Meeting – July 12, 2000 Agree to Limit Discounts
The Horse Barn
Beaver
Builder’s
Carmel
IMI
Shelby
Agree to Limit Discounts

8. THE CONSPIRACY Second Meeting – May, 2002 Agree to Limit Discounts
Hotel Conference Room
Beaver
Builder’s
Carmel
IMI
Shelby
Agree to Limit Discounts

9. THE CONSPIRACY Third Meeting – October 22, 2003 The Horse Barn Beaver
Builder’s
Carmel
IMI
Shelby
Agree to Limit Discounts, Contact Others

10. THE INVESTIGATION November, 2003
Employee of Prairie contacts DOJ
Initial concern not related to conspiracy
During conversation, mentions approaches by competitors
Agrees to record future conversations with competitors

11. THE INVESTIGATION November ’03 – February ’04
Several conversations recorded
President of Carmel Concrete
Talks about specific pricing agreements reached
Identifies other companies involved
Encourages Prairie to go along with agreements

12. THE INVESTIGATION May 25, 2004 FBI executes search warrants American
Beaver
Builder’s
Carmel
IMI
Shelby

13. THE INVESTIGATION May 25, 2004
FBI & DOJ attorneys conduct drop-in interviews of current and former executives and employees
American
Beaver
Builder’s
Carmel
IMI
Shelby

14. THE INVESTIGATION May, 2004 Shelby IMI Builder’s Carmel
Applies for conditional amnesty
2nd in; $29.2 million; 4 execs plead guilty
3rd in; $4 million; execs plead guilty
Last in; $225k fine; pres. pleads guilty

15. THE INVESTIGATION May ’04 – April ’06
Beaver
Denies culpability
No offer to cooperate
Company and 2 execs indicted by grand jury April 11, 2006

16. THE TRIAL The Charges Company and Two Executives The Two Executives
Price Fixing – 15 U.S.C. 1
July, 2000 through May 25, 2004
Ready mixed concrete sold in Indianapolis metro.
The Two Executives
False Statements – 18 U.S.C. 1001
Each denied knowledge of or participation in conspiracy when interviewed by FBI on May 25, 2004

17. THE TRIAL Our Witnesses
Coconspirators
Builder’s
Shelby
IMI
Carmel
FBI Agents
Testified about false statements

18. THE TRIAL Their Witnesses
Company’s former attorney
Former salesman
Denied knowledge of price fixing
Contradicted his May 25, 2004 interview
Company president
Denied authorizing price fixing
Admitted knowledge of execs attending meetings
Local politician

19. THE TRIAL The Verdict BEAVER Price Fixing Guilty
TWO EXECS Price Fixing Guilty
TWO EXECS False Stmts. Guilty

20. THE TRIAL The Sentences
BEAVER
$1.75 million fine
5 years probation
TWO EXECS
27 months incarceration
$5,000 fine

21. THE RESULTS COMPANIES PAY FINES OVER $35 MILLION
Includes IMI’s fine of $29.2 million
Largest single fine ever in domestic antitrust case
9 EXECS GET 5 – 27 MONTHS IN PRISON
Early cooperators got best deals